The global supply chain enables goods to be manufactured anywhere in the world and then transported to a distant market for sale. The business incentive to minimize manufacturing and transportation costs associated with an object results in items being manufactured in low-cost manufacturing facilities around the globe and then shipped to their final markets that are often half the world away. The lengthening of the supply chain from near the market to the other side of the world for a vast majority of items has resulted in long complex supply chains that span the globe for nearly every item that is sold in a global marketplace.
The near ubiquity of long, complex supply chains affords criminals multiple opportunities to introduce counterfeit products into the supply chains. Counterfeit products can be made to look identical to their cloned products, making it difficult if not impossible for a consumer to identify a counterfeit item either before or after purchase. Similarly, non-counterfeit specialists within the supply chains for a product may find it impossible to identify counterfeit products merely by looking at them. Thus, counterfeit specialists and strict processes and procedures must be employed at great expense to combat the intrusion of counterfeit products into a supply chain.
Inventory tracking systems based upon automated identification and data capture (“AIDC”) technologies such as magnetic stripes, bar codes and radio frequency identification (“RFID”) technologies are known in the art. Inventory tracking systems are used primarily to manage inventory within defined segments of a supply chain that exists from the point of manufacture to the point of sale (“POS”). A single inventory tracking and management system does not exist throughout the entirety of this supply chain. Instead, multiple inventory tracking and inventory management systems exist within this supply chain, with each system operating within a limited segment of the overall supply chain. Inventory management systems may be used to detect potential counterfeit products that exist within a single segment of the supply chain (for example, when multiple items with the same unique serial number exist in the same supply chain segment simultaneously), but they are not used to detect counterfeit products that exist between supply chains or supply chain segments. Inventory management systems also do not interrogate the authenticity of objects within their supply chain, and these systems have limited to no interactions with other systems that extend beyond their segment of the supply chain. Thus, while inventory management systems track an object during a specific portion of its life, they do not track the object either before or after that portion of its life, and they do not provide more than rudimentary capabilities to detect counterfeit products. Inventory management systems do not provide for ownership information as the owner of an object may not be the same as the owner of the supply chain in which an object finds itself. Furthermore, inventory tracking systems are targeted at industrial users and are not generally available to consumers.
Pedigree systems based upon either AIDC technologies or paper-based systems are known in the art. Pedigree systems provide a proof of chain-of-custody of an object, but they are unable to be used for inventory management or inventory tracking. Pedigree systems do not provide for item authentication. Instead, they provide for information authentication. Pedigrees may be generated for counterfeit items and for non-existent items since information only is being authenticated. Pedigree systems work based on the trust that the supply chain is physically secure and the trust that the actors within the supply chain are trustworthy. Pedigree systems do not provide chain-of-custody information for items traveling through supply chains that do not participate in the pedigree system. Further, pedigree systems do not provide for counterfeit product detection based upon global information, such as the duplication of an item identifier. Furthermore, pedigree systems do not provide for ownership information as the owner of an item is not always the entity in possession of the item, particularly in supply chains prior to the purchase by the end user. Pedigree systems are typically designed for the manufacturing, distribution and retail entities (including hospitals and pharmacies) involved with a product. Consumers are not the intended users of pedigree systems.
Counterfeit products have an impact on both the finances and the reputation of the victim manufacturers since the counterfeit products steal sales away from the victim manufacturer and are often of inferior quality to the authentic product. Distributors and retailers selling or handling counterfeit products may be similarly impacted and may have other legal liabilities incurred by their selling of counterfeit products. Consumers are impacted financially as well as experientially since the counterfeit product robs the consumer of the performance and capabilities of the authentic products. Inventory management and pedigree systems do not protect the consumer from counterfeit products that enter the primary supply channels or come through secondary channels or direct to the consumer.
The rise of social media and electronic auction sites has allowed criminals to market counterfeit products direct to consumers; thereby, bypassing the inventory management and pedigree systems utilized within the global supply chains. Individuals utilize these same media to sell their used or previously owned items which may or may not be counterfeit. When buying products from a reputable retailer, a consumer has confidence that they are purchasing an authentic product. When buying from another individual or over social media, such as an electronic auction site, a consumer has limited confidence in the authenticity of a product. Overt authenticity mechanisms such as holograms and bar codes are easily counterfeited along with the products themselves. And, for products bought used or pre-owned, the purchaser has limited confidence that the product is owned by the seller as opposed to being a lost or stolen item.